India's auto industry sees strong demand and capacity expansion in FY27

India’s automobile sector is maintaining robust demand across passenger, commercial and tractor segments, even as original‑equipment‑manufacturer margins face short‑term pressure. Wholesale dispatches rose 22‑30% year‑on‑year in June, with premium vehicles holding firm and mass‑market volumes expected to moderate later in FY27. Electric‑vehicle sales are leading growth, with electric two‑wheelers up 68‑91% and EVs accounting for over 75% of JSW MG Motor’s June sales, a 30% year‑on‑year increase.

Maruti Suzuki reported a production surge to 178,024 units in June, bolstered by a new ₹35,000 crore manufacturing complex at Kharkhoda. The plant, inaugurated by Prime Minister Narendra Modi and Japan’s Prime Minister Sanae Takaichi, will eventually reach a capacity of 1 million vehicles annually and create more than 21,000 jobs. The company also announced a similar‑scale investment in Gujarat, further cementing its position as India’s largest passenger‑vehicle maker.

Other OEMs posted strong results: Honda Motorcycle & Scooter India logged a 23% YoY rise in two‑wheelers, while Ola Electric’s June registrations hit 16,144 units, doubling its quarterly growth. Industry analysts project mid‑single‑digit volume growth for FY27, supported by rising consumer affordability, EV adoption and new model launches, though price hikes and raw‑material volatility could temper momentum.